Facebook is a social network service and website launched in February 2004 that is operated and privately owned by Facebook, Inc.[1] As of July 2010[update] Facebook has more than 500 million active users,[6][7][N 1] Users may create a personal profile, add other users as friends and exchange messages, including automatic notifications when they update their profile. Additionally, users may join common interest user groups, organized by workplace, school, or college, or other characteristics. The name of the service stems from the colloquial name for the book given to students at the start of the academic year by university administrations in the US with the intention of helping students to get to know each other better. Facebook allows anyone who declares themselves to be at least 13 years old to become a registered user of the website.
Facebook was founded by Mark Zuckerberg with his college roommates and fellow computer science students Eduardo Saverin, Dustin Moskovitz and Chris Hughes.[8] The website's membership was initially limited by the founders to Harvard students, but was expanded to other colleges in the Boston area, the Ivy League, and Stanford University. It gradually added support for students at various other universities before opening to high school students, and, finally, to anyone aged 13 and over.
A January 2009 Compete.com study ranked Facebook as the most used social network service by worldwide monthly active users, followed by MySpace.[9]Entertainment Weekly put it on its end-of-the-decade "best-of" list, saying, "How on earth did we stalk our exes, remember our co-workers' birthdays, bug our friends, and play a rousing game of Scrabulous before Facebook?"[10] Quantcast estimates Facebook has 135.1 million monthly unique U.S. visitors in October 2010.[11] According to Social Media Today as of April 2010, it is estimated that 41.6% of the U.S. population has a Facebook account. [12]

Contents

History

Mark Zuckerberg wrote Facemash, the predecessor to Facebook, on October 28, 2003, while attending Harvard as a sophomore. According to The Harvard Crimson, the site was comparable to Hot or Not,[13] and "used photos compiled from the online facebooks of nine houses, placing two next to each other at a time and asking users to choose the 'hotter' person".[14]

To accomplish this, Zuckerberg hacked into the protected areas of Harvard's computer network, and copied the houses' private dormitory ID images. Harvard at that time did not have a student "facebook" (a directory with photos and basic information). Facemash attracted 450 visitors and 22,000 photo-views in its first four hours online.[14][15]
The site was quickly forwarded to several campus group list-servers, but was shut down a few days later by the Harvard administration. Zuckerberg was charged by the administration with breach of security, violating copyrights, and violating individual privacy, and faced expulsion. Ultimately, however, the charges were dropped.[16] Zuckerberg expanded on this initial project that semester by creating a social study tool ahead of an art history final, by uploading 500 Augustan images to a website, with one image per page along with a comment section.[15] He opened the site up to his classmates, and people started sharing their notes.
The following semester, Zuckerberg began writing code for a new website in January 2004. He was inspired, he said, by an editorial in The Harvard Crimson about the Facemash incident.[17] On February 4, 2004, Zuckerberg launched "Thefacebook", originally located at thefacebook.com.[18]
Six days after the site launched, three Harvard seniors, Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra, accused Zuckerberg of intentionally misleading them into believing he would help them build a social network called HarvardConnection.com, while he was instead using their ideas to build a competing product.[19] The three complained to the Harvard Crimson, and the newspaper began an investigation. The three later filed a lawsuit against Zuckerberg, subsequently settling.[20]
Membership was initially restricted to students of Harvard College, and within the first month, more than half the undergraduate population at Harvard was registered on the service.[21]Eduardo Saverin (business aspects), Dustin Moskovitz (programmer), Andrew McCollum (graphic artist), and Chris Hughes soon joined Zuckerberg to help promote the website. In March 2004, Facebook expanded to Stanford, Columbia, and Yale.[22] It soon opened to the other Ivy League schools, Boston University, New York University, MIT, and gradually most universities in Canada and the United States.[23][24]
Facebook incorporated in the summer of 2004, and the entrepreneur Sean Parker, who had been informally advising Zuckerberg, became the company's president.[25] In June 2004, Facebook moved its base of operations to Palo Alto, California.[22] It received its first investment later that month from PayPal co-founder Peter Thiel.[26] The company dropped The from its name after purchasing the domain name facebook.com in 2005 for $200,000.[27]

Facebook launched a high school version in September 2005, which Zuckerberg called the next logical step.[32] At that time, high school networks required an invitation to join.[33] Facebook later expanded membership eligibility to employees of several companies, including Apple Inc. and Microsoft.[34] Facebook was then opened on September 26, 2006, to everyone of ages 13 and older with a valid email address.[35][36]
On October 24, 2007, Microsoft announced that it had purchased a 1.6% share of Facebook for $240 million, giving Facebook a total implied value of around $15 billion.[37] Microsoft's purchase included rights to place international ads on Facebook.[38] In October 2008, Facebook announced that it would set up its international headquarters in Dublin, Ireland.[39] In September 2009, Facebook said that it had turned cash flow positive for the first time.[40] In November 2010, based on SecondMarket Inc., an exchange for shares of privately held companies, Facebook's value was $41 billion (surpassing eBay's slightly) and it became the third-largest US Web Company after Google and Amazon.[41] Facebook has been identified as a possible candidate for an IPO by 2013.[42]
Traffic to Facebook increased steadily after 2009. More people visited Facebook than Google for the week ending March 13, 2010.[43] Facebook also became the top social network across eight individual markets in Asia—the Philippines, Australia, Indonesia, Malaysia, Singapore, New Zealand, Hong Kong and Vietnam, while other brands commanded the top positions in certain markets, including Google-owned Orkut in India, Mixi.jp in Japan, CyWorld in South Korea, and Yahoo!’s Wretch.cc in Taiwan.[citation needed]

Company

Most of Facebook's revenue comes from advertising. Microsoft is Facebook's exclusive partner for serving banner advertising,[44] and as such Facebook only serves advertisements that exist in Microsoft's advertisement inventory. According to comScore, an internet marketing research company, Facebook collects as much data from its visitors as Google and Microsoft, but considerably less than Yahoo!.[45] In 2010, the security team began expanding its efforts to counter threats and terrorism from users.[46] On November 6, 2007, Facebook launched Facebook Beacon, which was an ultimately failed attempt to advertise to friends of users using the knowledge of what purchases friends made.
Facebook generally has a lower clickthrough rate (CTR) for advertisements than most major websites. For banner advertisements, they have generally received one-fifth the number of clicks on Facebook compared to the Web as a whole.[47] This means that a smaller percentage of Facebook's users click on advertisements than many other large websites. For example, while Google users click on the first advertisement for search results an average of 8% of the time (80,000 clicks for every one million searches),[48] Facebook's users click on advertisements an average of 0.04% of the time (400 clicks for every one million pages).[49]
Sarah Smith, who was Facebook's Online Sales Operations Manager, confirmed that successful advertising campaigns can have clickthrough rates as low as 0.05% to 0.04%, and that CTR for ads tend to fall within two weeks.[50] Competing social network MySpace's CTR, in comparison, is about 0.1%, 2.5 times better than Facebook's but still low compared to many other websites. Explanations for Facebook's low CTR include the fact that Facebook's users are more technologically savvy and therefore use ad blocking software to hide advertisements, the users are younger and therefore are better at ignoring advertising messages, and that on MySpace, users spend more time browsing through content while on Facebook, users spend their time communicating with friends and therefore have their attention diverted away from advertisements.[51]

On pages for brands and products, however, some companies have reported CTR as high as 6.49% for Wall posts.[57] Involver, a social marketing platform, announced in July 2008 that it managed to attain a CTR of 0.7% on Facebook (over 10 times the typical CTR for Facebook ad campaigns) for its first client, Serena Software, managing to convert 1.1 million views into 8,000 visitors to their website.[58] A study found that for video advertisements on Facebook, over 40% of users who viewed the videos viewed the entire video, while the industry average was 25% for in-banner video ads.[59]
Facebook has over 1,700 employees, and offices in 12 countries.[60] Regarding Facebook ownership, Mark Zuckerberg owns 24% of the company, Accel Partners owns 10%, Digital Sky Technologies owns 10%[61], Dustin Moskovitz owns 6%, Eduardo Saverin owns 5%, Sean Parker owns 4%, Peter Thiel owns 3%, Greylock Partners and Meritech Capital Partners own between 1 to 2% each, Microsoft owns 1.3%, Li Ka-shing owns 0.75%, the Interpublic Group owns less than 0.5%, a small group of current and former employees and celebrities own less than 1% each, including Matt Cohler, Jeff Rothschild, California U.S. Senator Barbara Boxer, Chris Hughes, and Owen Van Natta, while Reid Hoffman and Mark Pincus have sizable holdings of the company, and the remaining 30% or so are owned by employees, an undisclosed number of celebrities, and outside investors.[62]Adam D'Angelo, chief technology officer and friend of Zuckerberg, resigned in May 2008. Reports claimed that he and Zuckerberg began quarreling, and that he was no longer interested in partial ownership of the company.[63]
On November 15th, 2010, Facebook announced it had acquired FB.com from the American Farm Bureau Federation for an undisclosed amount. On January 11th 2011, the Farm Bureau disclosed 8.5 million in "domain sales income", making the acquisition of FB.com one of the ten highest domain sales in history.[64]

Website

Facebook's homepage features a login form on the top right for existing users, and a registration form directly underneath for new visitors.

Users can create profiles with photos, lists of personal interests, contact information, and other personal information. Users can communicate with friends and other users through private or public messages and a chat feature. They can also create and join interest groups and "like pages" (formerly called "fan pages", until April 19, 2010), some of which are maintained by organizations as a means of advertising.[65]
To allay concerns about privacy, Facebook enables users to choose their own privacy settings and choose who can see specific parts of their profile.[66] The website is free to users, and generates revenue from advertising, such as banner ads.[67] Facebook requires a user’s name and profile picture (if applicable) to be accessible by everyone. Users can control who sees other information they have shared, as well as who can find them in searches, through their privacy settings.[68]

Optional profile shown on Facebook in 2011. Made available in December 2010.

The media often compares Facebook to MySpace, but one significant difference between the two websites is the level of customization.[69] Another difference is Facebook’s requirement that users utilize their true identity, a demand that MySpace does not make.[70] MySpace allows users to decorate their profiles using HTML and Cascading Style Sheets (CSS), while Facebook only allows plain text.[71] Facebook has a number of features with which users may interact. They include the Wall, a space on every user's profile page that allows friends to post messages for the user to see;[72]Pokes, which allows users to send a virtual "poke" to each other (a notification then tells a user that they have been poked);[73]Photos, where users can upload albums and photos;[74] and Status, which allows users to inform their friends of their whereabouts and actions.[75] Depending on privacy settings, anyone who can see a user's profile can also view that user's Wall. In July 2007, Facebook began allowing users to post attachments to the Wall, whereas the Wall was previously limited to textual content only.[72]

Over time, Facebook added features to its website. On September 6, 2006, a News Feed was announced, which appears on every user's homepage and highlights information including profile changes, upcoming events, and birthdays of the user's friends.[76] This enabled spammers and other users to manipulate these features by creating illegitimate events or posting fake birthdays to attract attention to their profile or cause.[77] Initially, the News Feed caused dissatisfaction among Facebook users; some complained it was too cluttered and full of undesired information, while others were concerned it made it too easy for others to track individual activities (such as relationship status changes, events, and conversations with other users).[78]
In response, Zuckerberg issued an apology for the site's failure to include appropriate customizable privacy features. Since then, users have been able to control what types of information are shared automatically with friends. Users are now able to prevent user-set categories of friends from seeing updates about certain types of activities, including profile changes, Wall posts, and newly added friends.[79]
On February 23, 2010, Facebook was granted US patent 7669123 on certain aspects of its News Feed. The patent covers News Feeds in which links are provided so that one user can participate in the same activity of another user.[80] The patent may encourage Facebook to pursue action against websites that violate its patent, which may potentially include websites such as Twitter.[81]
One of the most popular applications on Facebook is the Photos application, where users can upload albums and photos.[82] Facebook allows users to upload an unlimited number of photos, compared with other image hosting services such as Photobucket and Flickr, which apply limits to the number of photos that a user is allowed to upload. During the first years, Facebook users were limited to 60 photos per album. As of May 2009, this limit has been increased to 200 photos per album.[83][84][85][86]
Privacy settings can be set for individual albums, limiting the groups of users that can see an album. For example, the privacy of an album can be set so that only the user's friends can see the album, while the privacy of another album can be set so that all Facebook users can see it. Another feature of the Photos application is the ability to "tag", or label users in a photo. For instance, if a photo contains a user's friend, then the user can tag the friend in the photo. This sends a notification to the friend that they have been tagged, and provides them a link to see the photo.[87]

Profile shown on Thefacebook in 2005

Facebook profile shown in 2007

Facebook Notes was introduced on August 22, 2006, a blogging feature that allowed tags and embeddable images. Users were later able to import blogs from Xanga, LiveJournal, Blogger, and other blogging services.[35] During the week of April 7, 2008, Facebook released a Comet-based[88]instant messaging application called "Chat" to several networks,[89] which allows users to communicate with friends and is similar in functionality to desktop-based instant messengers.
Facebook launched Gifts on February 8, 2007, which allows users to send virtual gifts to their friends that appear on the recipient's profile. Gifts cost $1.00 each to purchase, and a personalized message can be attached to each gift.[90][91] On May 14, 2007, Facebook launched Marketplace, which lets users post free classified ads.[92] Marketplace has been compared to Craigslist by CNET, which points out that the major difference between the two is that listings posted by a user on Marketplace are only seen by users that are in the same network as that user, whereas listings posted on Craigslist can be seen by anyone.[93]
On July 20, 2008, Facebook introduced "Facebook Beta", a significant redesign of its user interface on selected networks. The Mini-Feed and Wall were consolidated, profiles were separated into tabbed sections, and an effort was made to create a "cleaner" look.[94] After initially giving users a choice to switch, Facebook began migrating all users to the new version beginning in September 2008.[95] On December 11, 2008, it was announced that Facebook was testing a simpler signup process.[96]
On June 13, 2009, Facebook introduced a "Usernames" feature, whereby pages can be linked with simpler URLs such as http://www.facebook.com/facebook as opposed to http://www.facebook.com/profile.php?id=20531316728.[97] Many new smartphones offer access to the Facebook services either through their web-browsers or applications. An official Facebook application is available for the iPhone OS, the Android OS, and the WebOS. Nokia and Research In Motion both provide Facebook applications for their own mobile devices. More than 150 million active users access Facebook through mobile devices across 200 mobile operators in 60 countries.
On November 15, 2010, Facebook announced a new "Facebook Messages" service. In a media event that day, CEO Mark Zuckerberg said, "It's true that people will be able to have an @facebook.com email addresses, but it's not email." The launch of such a feature had been anticipated for some time before the announcement, with some calling it a "Gmail killer." The system, to be available to all of the website's users, combines text messaging, instant messaging, emails, and regular messages, and will include privacy settings similar to those of other Facebook services. Codenamed "Project Titan," Facebook Messages took 15 months to develop.[98][99]

Reception

According to comScore, Facebook is the leading social networking site based on monthly unique visitors, having overtaken main competitor MySpace in April 2008.[100] ComScore reports that Facebook attracted 130 million unique visitors in May 2010, an increase of 8.6 million people.[101] According to Alexa, the website's ranking among all websites increased from 60th to 7th in worldwide traffic, from September 2006 to September 2007, and is currently 2nd.[102]Quantcast ranks the website 2nd in the U.S. in traffic,[103] and Compete.com ranks it 2nd in the U.S.[104] The website is the most popular for uploading photos, with 50 billion uploaded cumulatively.[105] In 2010, Sophos's "Security Threat Report 2010" polled over 500 firms, 60% of which responded that they believed that Facebook was the social network that posed the biggest threat to security, well ahead of MySpace, Twitter, and LinkedIn.[46]
Facebook is the most popular social networking site in several English-speaking countries, including Canada,[106] the United Kingdom,[107] and the United States.[108][109][110][111] In regional Internet markets, Facebook penetration is highest in North America (69 percent), followed by Middle East-Africa (67 percent), Latin America (58 percent), Europe (57 percent), and Asia-Pacific (17 percent).[112]
The website has won awards such as placement into the "Top 100 Classic Websites" by PC Magazine in 2007,[113] and winning the "People's Voice Award" from the Webby Awards in 2008.[114] In a 2006 study conducted by Student Monitor, a New Jersey-based company specializing in research concerning the college student market, Facebook was named the second most popular thing among undergraduates, tied with beer and only ranked lower than the iPod.[115]
On March 2010, Judge Richard Seeborg issued an order approving the class settlement in Lane v. Facebook, Inc., the class action lawsuit arising out of Facebook's Beacon program.
In 2010, Facebook won the Crunchie “Best Overall Startup Or Product” the third year in a row[116] and was recognized as one of the "Hottest Silicon Valley Companies" by Lead411.[117] However, in a July 2010 survey performed by the American Customer Satisfaction Index, Facebook received a score of 64 out of 100, placing it in the bottom 5% of all private sector companies in terms of customer satisfaction, alongside industries such as the IRS e-file system, airlines, and cable companies. Reasons for why Facebook scored so poorly include privacy problems, frequent changes to the website's interface, the results returned by the News Feed, and spam.[118]
In December 2008, the Supreme Court of the Australian Capital Territory ruled that Facebook is a valid protocol to serve court notices to defendants. It is believed to be the world's first legal judgement that defines a summons posted on Facebook as legally binding.[119] In March 2009, the New Zealand High Court associate justice David Glendall allowed for the serving of legal papers on Craig Axe by the company Axe Market Garden via Facebook.[120] Employers (such as Virgin Atlantic Airways) have also used Facebook as a means to keep tabs on their employees and have even been known to fire them over posts they have made.[121]
By 2005, the use of Facebook had already become so ubiquitous that the generic verb "facebooking" had come into use to describe the process of browsing others' profiles or updating one's own.[122] In 2008, Collins English Dictionary declared "Facebook" as their new Word of the Year.[123] In December 2009, the New Oxford American Dictionary declared their word of the year to be the verb "unfriend", defined as "To remove someone as a "friend" on a social networking site such as Facebook. As in, “I decided to unfriend my roommate on Facebook after we had a fight” ".[124]
As of April 2010, according to The New York Times, countries with most Facebook users are the United States, the United Kingdom and Indonesia.[125] Indonesia has become the country with the second largest number of Facebook users, after the United States, with 24 million users, or 10% of Indonesia's population.[126] Also in early 2010, Openbook was established, an avowed parody website (and privacy advocacy website)[127] that enables text-based searches of those Wall posts that are available to "Everyone", i.e. to everyone on the Internet.
Writers for The Wall Street Journal found in 2010 that Facebook apps were transmitting identifying information to "dozens of advertising and Internet tracking companies". The apps used an HTTP referrer which exposed the user's identity and sometimes their friends'. Facebook said, "We have taken immediate action to disable all applications that violate our terms".[128]

Criticism

Facebook has been met with controversies. It has been blocked intermittently in several countries including the People's Republic of China,[129]Vietnam,[130]Iran,[131]Uzbekistan,[132]Pakistan[133]Syria,[134] and Bangladesh[135] on different bases. For example on the basis of Anti-Islamic and religious discrimination content allowed by Facebook, it was banned in many countries of the world. It has also been banned at many workplaces to prevent the wasting of employees' time.[136] The privacy of Facebook users has also been an issue, and the safety of user accounts has been compromised several times. Facebook has settled a lawsuit regarding claims over source code and intellectual property.[137]

Political impact

Facebook's role in the American political process was demonstrated in January 2008, shortly before the New Hampshire primary, when Facebook teamed up with ABC and Saint Anselm College to allow users to give live feedback about the "back to back" January 5 Republican and Democratic debates.[138][139][140]Charles Gibson moderated both debates, held at the Dana Center for the Humanities at Saint Anselm College. Facebook users took part in debate groups organized around specific topics, register to vote, and message questions.[141]
Over 1,000,000 people installed the Facebook application 'US politics' in order to take part, and the application measured users' responses to specific comments made by the debating candidates.[142] This debate showed the broader community what many young students had already experienced: Facebook was an extremely popular and powerful new way to interact and voice opinions. An article written by Michelle Sullivan of Uwire.com illustrates how the "facebook effect" has affected youth voting rates, support by youth of political candidates, and general involvement by the youth population in the 2008 election.[143]
In February 2008, a Facebook group called "One Million Voices Against FARC" organized an event that saw hundreds of thousands of Colombians march in protest against the Revolutionary Armed Forces of Colombia, better known as the FARC (from the group's Spanish name).[144] In August 2010, one of North Korea's official government websites, Uriminzokkiri, joined Facebook.[145]
In 2010 in English the site was linked to and attributed to a rise in Syphilis cases based on research but this was rebuked by the company as deliberate misrepresentation of the concepts of correlation and causality.[146]

In media

At age 102, Ivy Bean of Bradford, England joined Facebook in 2008, making her one of the oldest people ever on Facebook. An inspiration to other residents of the care home in which she lived,[147] she quickly became more widely known and several fan pages were made in her honor. She visited Prime Minister Gordon Brown and his wife, Sarah, in Downing Street early in 2010.[148] Some time after creating her Facebook page, Bean also joined Twitter, when she passed the maximum number of friends allowed by Facebook. She became the oldest person to ever use the Twitter website. At the time of her death in July 2010, she had 4,962 friends on Facebook and more than 56,000 followers on Twitter. Her death was widely reported in the media and she received tributes from several notable media personalities.[149]